JPMorgan to Pay Fine, Refund Customers In $389 Million Credit Card Settlement
JPMorgan Chase & Co. will pay $80 million in penalties and set aside an estimated $309 million for refunds to credit card customers who were unfairly billed for card “add-on-products” they did not receive, federal banking regulators said Sept. 19.
The Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) issued separate but related consent orders with Chase Bank USA, N.A. and JPMorgan Chase Bank, N.A., over the marketing and sale of identity-theft protection and fraud protection services between 2005 and 2012.
Court Says Lack of Comparator Evidence Sinks Nurse’s Pregnancy, Sex Bias Claims
A part-time worker at a Miami hospital whose hours decreased in the months following her return from pregnancy leave and who was mistakenly fired based on a clerical error failed to present comparator or other evidence showing that the actions were discriminatory, a federal district court in Florida ruled Sept. 23 (Claude-Morency v. Univ. of Miami, S.D. Fla., No. 1:12-cv-21967, 9/23/13).
Marie Claude-Morency failed to show that other per diem workers at the University of Miami Hospital’s behavioral health department didn’t also have their hours cut over the three-month period in which a supposed “slow down” left her working only two shifts, the U.S. District Court for the Southern District of Florida found.
Applying Del. Law, Cal. Court Affirms Dismissal of Jacobs ‘Say-on-Pay’ Suit
Sept. 19 –The California Court of Appeal Sept. 17 affirmed the dismissal of a consolidated shareholder derivative lawsuit alleging that Jacobs Engineering Group Inc.’s(JEC) board violated its fiduciary duties by improperly increasing executive compensation in the face of poor company performance, and without shareholders’ consent (Charter Twp. of Clinton Police & Fire Ret. Sys. v. Martin , 2013 [...]
SEC’s New Accounting Fraud Task Force To Actively Seek Whistle-Blowers, Chief Says
The Securities and Exchange Commission’s Financial Reporting and Audit Task Force will actively solicit whistle-blowers, task force chairman David Woodcock said.
“Whistle-blowers are hugely important” in the financial reporting and accounting fraud arena, said Woodcock, who also is director of the SEC’s Fort Worth Regional Office. “We have cases on our docket now that no amount of analytics, no amount of screening or proactive efforts, in my opinion, would have ever discovered these cases,” he told a legal gathering. “It took someone on the inside to bring us this information.”
Press ‘Junkie’ Coverage of Arrested Teacher Didn’t Justify Discharge for Drug Possession
A tenured teacher in Brooklyn, N.Y., who was fired following his arrest for bringing heroin to jury duty, will be reinstated after a court-ordered penalty reduction, a New York Supreme Court judge decided Sept. 16 (Matter of Esteban v. N.Y.C. Dep’t of Educ., N.Y. Sup. Ct., No. 651904/13, 9/16/13).
Damian Esteban worked as a tenured teacher at the Williamsburg High School for Architecture for two years prior to his arrest. Following compulsory arbitration during which arbitrator Alan Berg found Esteban’s testimony to be “entirely truthful,” Berg imposed a penalty of termination of employment.
Criminal Prosecution Not an Attempt To Collect Debt, Not a Violation of Stay
A debtors’ counterclaim, which asserted that a creditor’s pursuit of a criminal complaint violated the automatic stay of Bankruptcy Code Section 362, was properly dismissed, the U.S. Bankruptcy Appellate Panel for the Eighth Circuit held Aug. 29 (Legendary Stone Arts, LLC v. Maness (In re Maness), B.A.P. 8th Cir., No. 13-6037, 8/29/13).
Judges Thomas L. Saladino, Robert J. Kressel, and Anita L. Shodeen found that the criminal prosecution was not an attempt to collect a debt, even though restitution was a potential remedy of the prosecution, and therefore affirmed the bankruptcy court.
Man Sentenced to 30 Months for Commodity Fraud
A California man was sentenced to 30 months in prison Sept. 16 by the U.S. District Court for the Northern District of California after previously pleading guilty to conspiring to defraud investors in a foreign currency exchange fund (United States v. Hatfield, N.D. Cal., No. 09-cr-01195 9/16/13).
In a Sept. 17 statement, U.S. Attorney Melinda Haag said defendant Rodney Hatfield admitted that he obtained money from the public, including fellow church-goers, by making false representations about the profitability of his trading and the value of investors’ accounts.
Muddled Body Of Law Related To IP Hasn’t Caught Up With Cloud Computing
The biggest concerns over cloud computing in Germany continue to revolve around data protection, but a recent ruling that a cloud provider must monitor external websites for links to copyright infringing content has now complicated the situation even further, according to experts who spoke with Bloomberg BNA.
The problem, according to some experts, is that courts are only just beginning to rule on cloud computing in the context of the German Copyright Act, meaning there remains a gray area in which regulation has failed to catch up with technology.
Midwife Who Knew Rival’s Blog Post Isn’t Infringing May Be Liable for DMCA Notice
A copyright holder who allegedly conceded that she knew a blogger’s online post was not infringing when she sent the blogger’s hosting company a Digital Millennium Copyright Act takedown notice might be liable for making a misrepresentation in a DMCA notice, the U.S. District Court for the District of Massachusetts held Sept. 10 (Tuteur v. Crosley-Corcoran, D. Mass., No. 1:13-cv-10159-RGS, 09/10/13).
Judge Richard G. Stearns denied the copyright holder’s motion to dismiss. The blogger adequately alleged that the copyright holder knowingly and materially misrepresented that the blogger infringed the copyrighted photograph by re-posting it on her website, the court held.
IRS Issues Frequently Asked Questions, Answers on FATCA for Financial Institutions
The Internal Revenue Service released two new sets of frequently asked questions and answers to help taxpayers meet the requirements of the Foreign Account Tax Compliance Act.
One set of FAQs deals with the online system that will be used by foreign financial institutions (FFIs) and other affected entities to register to do reporting under the law.
Failure to Inform Worker With Cancer About Jobs May Breach ADA Duty, Judge Decides
A production clerk in Illinois who resigned the same day she told her supervisor she had been diagnosed with cancer and asked about the availability of “easier jobs” can proceed to trial on claims that the employer failed to reasonably accommodate her disability and constructively discharged her, a federal judge in the state ruled Sept. 13 (Suvada v. Gordon Flesch Co., N.D. Ill., No. 11-07892, 9/13/13).
Denying summary judgment to Gordon Flesch Co., Judge Edmond E. Chang of the U.S. District Court for the Northern District of Illinois found that Michelle Suvada’s conversation with her supervisor triggered the office services provider’s duty under the Americans with Disabilities Act and the Illinois Human Rights Act to engage in an interactive process to identify potential reasonable accommodations.
Sen. Warren Urges Quick Action To Limit Risk from Big Institutions
Sen. Elizabeth Warren (D-Mass.) called for congressional action to limit systemic risks from major financial institutions, saying regulatory implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act has stalled in large part because of intense industry lobbying.
Warren, who called the 2010 legislation “the strongest in three generations,” said regulatory agencies should use the tools they have to fully implement the law.
Ex-SEC Official: Stay Tuned for Congress To Require More Social, Political Disclosures
Congress likely will continue utilizing the Securities and Exchange Commission’s disclosure rules to effect social and political goals, Meredith Cross, the former director of the agency’s Division of Corporation Finance, said Sept. 11.
“Requiring companies to post potentially embarrassing information” on Edgar–the commission’s financial reporting system– “even if the information is not qualitatively or quantitatively material to investors, can be a very powerful motivator to change corporate behavior,” said Cross, now a partner at Wilmer Cutler Pickering Hale & Dorr LLP, Washington.
Small Business Exemption in Online Sales Tax Bill Should Be Increased, AICPA Says
The American Institute of Certified Public Accountants urged lawmakers to revise legislation aimed at boosting collection of sales tax on Internet-based purchases, including exempting more retailers from collecting tax.
The AICPA, which lobbies on behalf of certified public accountants, wrote Sept. 10 to the chairmen and ranking members of the House Ways and Means Committee, the Senate Finance Committee and the Judiciary committees of both chambers, suggesting lawmakers allow retailers with “substantially” more than $1 million in annual remote sales–the threshold written into the Marketplace Fairness Act–to not collect sales tax.
Filling Out Basic Forms Without Signing Doesn’t Justify Sanctions for ‘Ghostwriting’
Sept. 10 –Lawyers did not engage in bankruptcy fraud, or violate ethics rules on candor and dishonesty, by filling out and filing a preprinted bankruptcy petition for a client without putting their signatures on it, the U.S. Court of Appeals for the Eleventh Circuit decided Aug. 29, vacating sanctions against the two attorneys (Torrens v. Hood (In re Hood), 11th Cir., No. 12-15925, 8/29/13).
Speaking through Judge Charles Reginald Wilson, the court disagreed with bankruptcy and district court judges that the lawyers’ assistance constituted prohibited ghostwriting. Florida’s ethics rule on limited-scope representation allows lawyers to provide undisclosed help with basic fill-in-the-blank forms, the court found.
White House: Union Workers Won’t Get Exemption for ACA Credits With Group Plans
Sept. 13 –The Obama administration has rebuffed efforts from labor unions that would allow union workers to receive premium tax credits under the Affordable Care Act in addition to their employer-sponsored health coverage, according to a White House official.
In an e-mail to reporters describing President Barack Obama’s discussions with labor union leaders at the White House Sept. 13, a White House official said the Treasury Department has sent a letter that makes it clear it “does not see a legal way for individuals in multiemployer group health plans to receive individual market tax credits as well as the favorable tax treatment associated with employer-provided health insurance at the same time.”
No Relief for Pre-2009 Alleged Infringement Of Funk Rock Records by the Beastie Boys
Sept. 11 –A licensing entity for recordings by a Washington, D.C., funk rock band was barred from seeking relief for alleged infringement by the rap group the Beastie Boys that occurred before 2009, the U.S. District Court for the Southern District of New York ruled Sept. 10 (TufAmerica, Inc. v. Diamond, S.D.N.Y., No. 1:12-cv-03529-AJN, 9/10/13).
Granting in part a motion to dismiss by the Beastie Boys, the court along the way rejected several allegations of infringing samples after applying the “fragmented literal similarity” test.
No Interest, Inflation Adjustments For Victims of Bernard Madoff’s Scheme
Sept. 11 –The U.S. Bankruptcy Court for the Southern District of New York Sept. 10 ruled as a matter of apparent first impression that claims by victims of fraudster Bernard Madoff’s Ponzi scheme may not include interest, inflation adjustments or other “time-based damages” (Sec. Investor Prot. Corp. v. Bernard L. Madoff Inv. Sec. LLC , 2013 BL 241099, Bankr. S.D.N.Y., Adv. Pro. No. 08-01789 (BRL), 9/10/13).
Judge Burton Lifland said that the language and framework of the Securities Investor Protection Act and other factors support trustee Irving Picard’s unadjusted net investment method for determining the net equity claims of Bernard L. Madoff Investment Securities LLC’ customers. Under this method net equity claims of BLMIS customers would be calculated based upon the monies that the customers deposited in their BLMIS accounts, less any amounts they withdrew.
Senate Environment Panel Plans Hearing To Discuss Fuel Taxes, Highway Trust Fund
Sept. 10 –The Senate Environment and Public Works Committee will examine a potential fuel tax increase as part of a Sept. 25 hearing to discuss the solvency of the Highway Trust Fund.
A committee aide confirmed the hearing, which has not been formally announced, to Bloomberg BNA Sept. 10. The witness list is still being finalized.
Colorado Entity Estopped From Asserting Rights in Characters Created by Stan Lee
Sept. 10 –An entity originally formed to manage Stan Lee’s rights in the characters he created was estopped from bringing a copyright infringement claim against Walt Disney, the producer of recent films based on Marvel superheroes, the U.S. District Court for the District of Colorado ruled Sept. 5 (Stan Lee Media, Inc. v. Walt Disney Co., D. Colo., No. 1:12-cv-02663-WJM-KMT, 09/05/13).
Granting a motion to dismiss, the court found that issue preclusion, laches, and the statute of limitations all prevented the entity from bringing claims.